Effects of the agricultural commodity and the food price volatility on economic integration: an empirical assessment

Abstract

This paper empirically examines the effects of the global agricultural commodity price volatility and the food price volatility on the level of economic integration over the period 1970-2012. The benchmark regressions are based on the data from 133 countries. The results indicate that the level of economic integration is negatively related to both the agricultural commodity price volatility and the food price volatility. In addition to this, the negative impacts of the agricultural commodity price volatility and the food price volatility on the level of economic integration are statistically significant in the middle- and the high-income countries. These findings remain robust when it considers different estimation techniques and different measures of price volatility, and deals with extreme cases.